4 Concrete in Australia Vol 39 No 3
NEWS
State of the concrete industry
by Boyce Wong
e rst quarter of 2013 saw total
national pre-mixed concrete (PMC) at
5.57 million m3 -- a seasonal decline of
17.9% from the previous quarter and
down 3.5% from the same time last
year, as the industry slowly gears up
again following the holiday period.
All mainland states recorded a
seasonal decline, with the largest
percentage decline coming from Qld:
• NSW produced the largest volume for
the March 13 quarter at 1.5 million
m3 (12.7% (211,600m3) and 1.5%
from March 12 quarter); followed by
• Vic (17.5% (305,600m3) to 1.4 million
m3; 8.3% from March 12 quarter);
• Qld (26.3% (463,700m3) to 1.3 million
m3; 5.9% from March 12 quarter);
• WA (11.1% (90,300m3) to 720,700m3;
3.0% from March 12 quarter); and
• SA (16.3% (64,400m3) to 331,300m3;
1.8% from March 12 quarter).
e concrete industry can expect
varying degrees of fortune from state
to state, dependent on the economic
climate, with regards to the concrete
intensive sub-sectors:
• A boost in consumer con dence
should see the residential sector
experience positive growth,
particularly Qld, NSW and WA.
• e non-residential sector showing
moderate growth, with signs of
varying activity by sector and by state
• e next phase of the federal.
government s Nation Building
Program is focused heavily on
infrastructure construction. Industry
observers are expecting the residential
building sector to experience a solid
recovery over the next three years,
driven by low interest rates and a
stability of housing prices.
Qld, NSW and WA are expected to be
the strong performers for the states.
According to Master Builders
Australia, the value of residential
building work is forecast, in real terms,
to grow from $46.2 billion in 2013/14 to
$60.9 billion in 2015/16. According to
the Construction and Property Services
Industry Skills Council, the construction
and property services industry -- the
economy s third largest employer -- faces
a skills shortage of 45,000 workers in the
next three years because of a forecast
rebound in residential building.
Employment is expected to grow by
1.5% per year through to 2016 -- faster
than overall jobs growth.
BIS Shrapnel has indicated that
the private sector investment is
expected to support non-residential
building as public sector funding
declines in 2013/14, particularly in the
commercial and industrial building
sector. Underlying this is an improving
economic climate and an easing in
borrowing costs.
Re ecting improving economic
conditions and emerging undersupplies
in various markets, commercial and
industrial building is forecasted to rise
16%.
An unexpected slump in construction
activity -- particularly engineering
construction -- has wiped $1 billion o
Australia s gross domestic product in the
March 13 quarter, raising fears that the
transition from mining to the rest of the
economy may not be as forthcoming as
predicted.
Finally, the ABS has reported that
seasonally adjusted construction activity
in Australia shrank by 2% in the rst
quarter of 2013, wiping out almost all of
its growth over the past year.
In terms of projects in the pipeline,
according to the federal budget released
in May 13, under the former Gillard
government, as part of the next phase
of the federal government s Nation
Building Program, an allocation of $24
billion to new road and rail projects has
been made up to 2018/19 including $3
billion for the Melbourne Metro and
$715 million for the Cross River Rail in
Brisbane.
ere is also new funding for
major roads in Sydney, including $1.8
billion for the M4 extension and M5
duplication and $400 million for the F3-
M2 "missing link" to be delivered by the
NSW government. $500 million is also
assigned for the Perth Light Rail Project
and Airport Link over the next 10 years.
However, the next phase of the Nation
Building Program will not start until
2014/15 and the majority of the funding
will not be allocated until early next
decade. And it will also be conditional
on state governments matching the
funding and a new alliance with the
private sector to deliver the projects.
Boyce Wong is the marketing
analyst for Cement Concrete
& Aggregates Australia.